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Research Alert: CFRA Keeps Strong Sell Recommendation On Shares Of Nov Inc.

· 02/05/2021 08:26

01:25 PM EST, 02/05/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

Our $10 target price, kept steady, reflects an 11.7x multiple of enterprise value to projected '22 EBITDA, a discount to NOV's historical forward average but a 20% premium to peers (consistent with NOV's three-year average premium). We keep our EPS estimates for '21 and '22 at -$0.33 and $0.12, respectively. NOV posts Q4 normalized EPS of -$0.29 vs. $0.25, missing the -$0.12 consensus forecast. Despite efforts to cut costs, EBITDA margins fell 90% Y/Y and 75% sequentially to 1.3% as the pandemic continued to hinder NOV's operations and customer base. Equipment orders remain scarce as the rig technologies segment was the only segment to report a book-to-bill ratio above 1. NOV management points to offshore wind project servicing for big growth potential amid the clean energy transition, and we tend to agree, but we think material growth in this business is at least five years out. And while higher oil prices should lead to gradual increases in activity, we think further declines are plausible in the near term.